Aviation fuels will fall into the new “development fuels” category that should provide a higher level of incentive in recognition that the aviation sector has limited options to decarbonise and requires additional support to manufacture the high specification fuels required. The target set for development fuels is at 0.1% in 2019, rising to 2.8% in 2032.

Meanwhile, the use of crops in fuel production will also be capped at 4% in 2018, reducing in equal increments annually to reach 2% in 2032.

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Jesse Norman MP, who led the consultation said: “For the first time the market trading mechanism of the Renewable Transport Fuels Obligation will encourage technological innovation to develop and supply sustainable fuels for aviation.

We will maximise the industrial opportunities to be gained for the UK, by increasing our energy resilience through reducing reliance on imported fossil fuels.”

He added: “Our legislative changes should also encourage a clear demand side pull in the UK market. But we recognise that capital investment support can play a critical role in generating additional domestic supply. That is why we have launched a second Advanced Fuels Competition already this year. The Future Fuels for Flight and Freight Competition (F4C) will provide up to £22 million to promote the development of an advanced low carbon fuels industry within the UK.”

The news is welcomed by KTN’s Sustainable Aviation Fuel Special Interest Group (SAF SIG), backed by Government and co-funded by the Department for Transport, which works with partners to build the sustainable aviation fuel supply chain and aims to accelerate development of the sustainable aviation fuel sector in the UK, which is projected to generate £265 million GVA and 4,400 jobs by 2030.